Getting into hot water

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The Carr Government will not get a better climate, so to speak, in which to confront the political nasties of weaning Sydney off its over consumption of water. With no end in sight for the city's big dry, the worrying depletion of dams and the annual addition of 18,500 dwellings, the issues of water sustainability are nearer to public centre-stage than at any point in decades. Constraining demand for the precious liquid will be painful indeed, for government and consumers alike. It makes sound political sense to strike while the iron is hot because the public is unusually alert to the dangers of inaction and therefore conducive to the challenges of change.

And change there will be. As of yesterday, every contract for a new dwelling must demonstrate water consumption 40 per cent below the city average and 25per cent fewer greenhouse emissions. Radical initiatives expected to be included in the Government's water strategy, due to be unveiled in October, include step pricing, mandatory retrofitting of water-saving devices such as low-flow shower heads and dual-flush cisterns, reliance on recycled effluent for outdoor use in all new housing developments and a $400 million pipeline from the Shoalhaven. Longer-term options include desalination and a pricing model designed to deter high consumption. If the Independent Pricing and Regulatory Tribunal gives the go-ahead to step pricing, Sydney Water customers who exceed the annual allocation of 450 kilolitres (average annual household consumption is 300 kilolitres) can expect a price rise.

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But that is not enough for the Utilities Minister, Frank Sartor. He wants all charges, including fixed charges for water and sewers, rolled into one user charge, doubling over five years the price of water from its 98 cents a kilolitre. On this New York model, average users would pay no more but a 500-kilolitre customer - typically, the owner of a large garden and swimming pool - would pay an extra $200 a year.

Pricing policy is a key to slowing consumption. Instructively, the 40 per cent of households that do not pay their bills direct to Sydney Water use an average 19per cent more than households that do. Even with water pitched at low prices, customers take note if made aware of costs. Unfortunately, to be more effective, price rises must be steep. That introduces all sorts of equity questions but none is substantial enough to outweigh the urgency for corrective action.

One thing is certain. Sydney will run out of water if rainfall continues to disappoint and the city's thirst is unabated. The IPART found in April: "The tribunal is very concerned about the risk that Sydney Water's customers' demand for water will outstrip the existing water supplies."

Every delay is lost opportunity. When the heavens open and the dams fill, the sense of urgency will retreat and old habits of waste will return to the fore. But relief will only be temporary and structural shortcomings unattended. Now is the time to build a safer certainty.

Sneaking home in Canada

It is easy to argue that Canada's Prime Minister, Paul Martin, snatched a sort of defeat from the jaws of victory with this week's election in which his Liberal Party was returned to power, this time in a minority government. The truth is that after a strong start, holding the Conservative Party at bay was the surprise outcome, since it only became apparent late in the campaign that a minority Liberal Government could emerge.

Mr Martin will lead Canada's first minority government in 25 years, and he will no doubt hope it survives longer than the previous one, led by Joe Clark, which lasted just six months. He will rely on the New Democratic Party to stay in power and try to keep his distance from the separatist Bloc Quebecois which enjoyed a high level of support, garnering half the popular vote in Quebec.

Mr Martin, a millionaire and one-time shipping magnate who was a former finance minister, became prime minister just six months ago, replacing Jean Chretien who was held the post for a decade. Yet the high expectation that greeted his rise to the leadership was soon spoiled by a scandal involving a program to boost national government support in Quebec, where a large part of the funds may have been siphoned off by firms associated with the ruling Liberal Party, provoking a storm of criticism.

Holding onto government with the support of the New Democratic Party may see some liberal policies such as gay marriage and decriminalising marijuana put on the agenda, as Mr Martin works to honour promises such as boosting health spending. But beyond that, what lessons does his partial victory hold for Australia?

Over the past decade or so, Canada has become much more introspective than the United States, which it smugly and occasionally criticises in a manner masking secret admiration. A more liberal Canada will be in contrast to America's conservative tack under President George Bush. Over the past few years, these neighbours have quietly gone their own ways on key foreign policy. Canada deployed forces to Afghanistan to work with NATO on the war against terrorism, but held back from the US-led invasion of Iraq.

The consequent chilly relations with Washington have been patched up - a useful lesson to Australians concerned that criticising the US could undermine our own close relations with Washington.